TAIEX up on Wall Street rally
The TAIEX came off an early high yesterday as selling emerged after the index briefly breached the technical resistance level of around 7,100 points following a rally on Wall Street overnight, dealers said.
Turnover remained thin, with many investors staying on the sidelines amid lingering concerns over a possible capital gains tax on stock investments, dealers said. Worries over the upcoming elections in Greece also prevented investors from entering the trading floor, they added.
The weighted index closed up 24.16 points, or 0.34 percent, at 7,080.31, after moving between 7,052.36 and 7,139.16. Turnover totaled NT$64.97 billion (US$2.17 billion) during the session.
China cuts base lending rate
China has cut its benchmark lending rate for the first time in nearly four years as it tries to reverse a sharp economic slowdown.
The Chinese central bank said yesterday the interest rate on a one-year loan would be reduced by 0.25 percentage points to 6.31 percent effective today, while the one-year deposit rate would fall by the same amount, according to a statement.
The rate cut adds to a string of measures in recent weeks to boost slowing economic growth.
Beijing has promised extra spending on public works and has approved a multibillion US dollar series of corporate investments to pump money into the economy.
Investment to hit US$39.5bn
Semiconductor Equipment and Materials International predicted on Wednesday that the capital spending of wafer foundries will reach US$39.5 billion this year, up 2 percent from last year.
Moreover, spending by foundries should rise to a record high of US$46.3 billion next year, the US-based trade organization said in a report.
Wafer companies in South Korea will spend the most at US$11 billion this year, while Taiwan will spend up to US$8.5 billion, followed by US$8.3 billion to be spent by companies in the US, according to the report.
This year, construction work on 11 wafer plants will begin and a total of 45 projects will be launched, the association said.
In addition, the group said it expected seven plants and 24 new projects to be carried out next year, with the industry in South Korea remaining the world’s major investor with capital spending rising to US$12.5 billion. The US will become the second-largest investor with spending reaching US$11.5 billion, while Taiwan is due to invest around US$8 billion next year.
First Steamship to raise stake
First Steamship Co (益航), a local bulk carrier, said yesterday in a statement it planned to increase its stakeholding in Grand Ocean Retail Group (大洋百貨) from its current 47.06 percent.
The company said it would spend NT$600 million (US$20million) to purchase shares in Grand Ocean, a department store chain operator in China, on the open market.
Grand Ocean started trading on the Taiwan Stock Exchange on Wednesday, but saw its share price fall below the initial listing price of NT$120 to end at NT$119.50, amid concerns over a slowdown in the Chinese economy.
NT dollar follows region up
The New Taiwan dollar rose against the US dollar yesterday, edging up NT$0.029 to close at NT$29.906 as the local currency continued to gain momentum in line with its regional counterparts on hopes that the US Federal Reserve will further loosen liquidity to boost the US economy, dealers said.